Michael Jackson, Captain EO and the business of conquering the world – Part 5- Jobete

By The Last Tear (Lou)

                                               

I sometimes think that all you tell me of knighthood,

kingdoms, empires and islands is all windy blather and lies.

Don Quixote, Book 1, Part 15

In our quest – understanding in a truthful manner Michael Jackson’s life – there are moments that we think like Sancho Panza when he questions Don Quixote and the credibility of his stories. Suddenly, we read a sentence or a name or a paragraph in an article. Everything changes miraculously and new paths open up under our amazed eyes; our quest becomes as adventurous as Grail’s!

There is no doubt that Jackson conquered millions of hearts during his life-long artistry – there are people from all races and religion who truly love him.

He could also have conquered more in the business world if he was not stabbed in the back in the most vicious way by his competitors.

Indeed in part 1 and 2 of this study we read about some of Jackson’s business deals that he made during the 80’s and at the beginning of the 90’s. The deals were mostly successful especially the ones in connection with the music industry.

In part 3, we reviewed how the music industry was born and how Jackson positively influenced its evolution.

We talked long about the ATV catalog and about how Jackson bought it. We added that the artist had the intention of owning more music catalogs and had the plan to manage if not the whole industry but a big part of it.

We believe that Jackson had the ability to run this industry. In this case, it would have become less discriminatory, more fair and in favor of the artists. It would have treated them as creative and gifted   persons not as slaves who have to work hard mostly for the benefit of the bosses.

Sadly, Jackson’s plans were sabotaged by his adversaries inside the music industry. It is no coincidence that his opponents targeted him through the industry’s best known magazine, RollingStone. In part 4, we reviewed several RS articles to show its long anti Jackson tradition.

During the 80’s and outside the art world, Jackson also made it clear that he had intentions of becoming an important factor in other business branches. These plans multiplied the number of his opponents who saw in him a fierce rival.

In this part, we will talk about business but we will mostly look deeper at some conflicts that Jackson had to face during these years. Please understand that we do not hate nor love the persons who are mentioned in this blog. Our aim is to show the actions of these people towards Michael Jackson by using only facts. We might find later other facts that emphasize our conclusions or weaken them; in any of these cases we will update the blogs.

You might find this blog tedious and the information repetitive. Please understand that the subject is delicate and we have to study it from every possible angle.

Let us go back to the topic that we mentioned above: owning music catalogs. Jackson was aware of the value of owning the publishing rights of recorded songs. He bought ATV catalogs and several others. In fact, he did not need Paul McCartney – as the media has always told us – to guide him and to encourage him to buy these catalogs. There were others whom he had probably watched closely and followed as models: Berry Gordy, Sam Cooke and Ray Charles.

72160774PS039_Film_Life_s_2samcookeraycharles

In the Encyclopedia of African American Music, volume 3, chapter Black-Owned Music Publishing Company we find out several important facts (pages 104-106):

[] The success of gospel music publishing houses also influenced how black entrepreneurs approached the dissemination of black popular music during the postwar years. Many focused their efforts on the recording industry and the growing dominance of small independent labels, but some recognized the importance of songwriting copyrights and the publishing rights of the songs being recorded. One of the most popular examples of this is Berry Gordy’s Jobete Music, which served as the publishing company associated with Motown Records. Formed in 1958, the Jobete Music publishing house extracted its name from the names of Gordy’s three children – Joy, Berry, and Terry – and was founded to oversee the licensing of the label’s songs. It was one of a conglomerate of the businesses that controlled every facet of the music, images, and the profits generated by the label []

Artists who signed to the label as performers or songwriters signed agreements for their works to be published through Jobete, which meant that artists who wrote material would have their songwriting royalties used to cover the cost incurred in the production of their records. All of the label’s songwriters, including Smokey Robinson and Holland-Dozier-Holland, were required to sign distribution and copyright agreements with the company, which gave Gordy complete control over the use of the material. Jobete’s catalog grew to be influential and lucrative []

Throughout the 1960’s, the company was consistently named Broadcast Music Inc.’s top publishing company and, with the crossover success of Motown, it was one of a few companies not adversely affected by the British Invasion (The Beatles – read more about British Invasion in the part 3). The company’s policies did not escape scrutiny, however, and eventually artists and songwriters Holland-Dozier-Holland left the label over royalty disputes. Despite the controversy, Jobete still has one of the most lucrative catalogs in popular history []

Gordy was not the only person who understood the importance of owning publishing rights. Artists Sam Cook and Ray Charles, [] would form their own publishing companies that would provide them with the autonomy achieved at that time only by a few white performers and a number of black gospel performers and composers []

The unexpected conflict

In 1969, when Michael and his brothers signed a contract with Motown, they would not have believed that in a few years they would be in conflict with Gordy and his company.

Actually in 1974, Joseph Jackson – as the manager of the group – and the J4 (perhaps J5) were not pleased with Motown anymore. They thought the royalties they got from Gordy were too low; besides they were not allowed to write and produce music themselves. They had to obey Motown’s decisions and plans for them. There was a drop in their single and album sales and Motown seemed not to care about it.

On May 14, 1975 Michael had a private meeting with Gordy. Jackson wanted to be more involved in creation and production, he wanted his own music. Gordy promised to find a way. Later Jackson wrote about this meeting in his book Moonwalk:

Our problems with Motown began around 1974, when we told them in no uncertain terms that we wanted to write and produce our own songs. Basically, we didnt like the way our music sounded at the time. We had a strong competitive urge and we felt we were in danger of being eclipsed by other groups who were creating a more contemporary sound.

Motown said, “No, you cant write your own songs; you’ve got to have songwriters and producers.” They not only refused to grant our requests, they told us it was taboo to even mention that we wanted to do our own music. I really got discouraged and began to seriously dislike all the material Motown was feeding us. Eventually I became so dissapointed and upset that I wanted to leave Motown behind.

When I feel that something is not right I have to speak up. I know most people dont think of me as tough or strong willed, but that is just because they dont know me. Eventually my brothers and I reached a point with Motown where we were miserable but no one was saying anything. My brothers didnt say anything, My father didnt say anything. So it was up to me to arrange a meeting with Berry Gordy and talk to him. I was the one who had to say that we-the Jackson 5-were going to leave Motown. I went over to see him, face to face, and it was one of the most difficult things I’ve ever done. If I had been the only one of us who was unhappy, I might have kept my mouth shut, but there had been so much talk at home about how unhappy we ALL were that I went in and talked to him and told him how we felt. I told him I was unhappy.

Remember, I love Berry Gordy. I think he’s a genius, a brilliant man, who’s one of the giants of the music business. I have nothing but respect for him, but that day I was a lion. I complained that we weren’t allowed any freedom to write songs and produce. He told me that he still thought we needed outside producers to make hit records.

But I knew better. Berry was talking out of anger. That was a difficult meeting, but we’re friends again, and he’s still like a father to me-very proud of me and happy about my success. No matter what, I will always love Berry because he taught me some of the most valuable things I’ve learned in life. He’s the man who told the Jackson 5 they would become a part of history and that is exactly what happened.

We believe Michael’s words when he wrote about how he loved Gordy. However the process of leaving Motwon was not as easy as Michael described in this paragraph.

ross_marlon_gordy_michaelimagesCA0TGDON

In 1974, Joseph Jackson who received a percentage as the J5 manager, had already sought out other recording companies, independent and major. He had talked to Ahmet Ertegun the owner of Atlantic. But Ertegun was not interested (Please read part 3 of these blogs and Napier-Bell’s article to know more about Ertegun brothers).

At that time CBS was the biggest music company in US and wanted a black music division. They had become aware of the commercial potential of African-American performers. The Jackson brothers got a contract with Epic, a subsidiary of CBS record which the J5 minus Jermaine signed on May 28, 1975. They had found this contract much more satisfactory. CBS and the J5 minus Jermaine announced officially their collaboration in a press conference in New York.

Read more about this matter from the book The Black Culture Industry, by Ernest Cashmore pages 125-128. The analysis of the facts in these pages are Cashmore’s and we don’t always agree with him. What we are focusing on are the facts and the conflicts:

[] Gordy’s Jobete Publishing was, as we have seen, a crucial element of his empire and the Jackson 5’s material was housed under this roof. Joe Jackson wanted his sons to write at least some of their own material and so draw some of the revenue that would otherwise flow into Jobete. This could be considerable; for instance, a million-selling single would typically generate 2.7 cents per copy sold for the band. This might be worth an extra 2 cents per copy more had the band also written the material.

In 1975, Joe Jackson told his sons that the situation with Gordy had become intolerable and that that were destined to leave Motown. Gordy first heard the news through Jermaine Jackson, who was by then his son-in-law, having married Gordy’s daughter Hazel. Jermaine informed him that the rest of the band had signed with CBS, despite the fact that there was a year of the Motown contract to run []

[] CBS took a chance when it offered a $750,000 advance and $350,000 guaranteed per album against royalties. But, it was the royalty rate that differed significantly from that received at Motown, which had paid out 3 percent on the wholesale price of each record sold. CBS offered 27 percent of the wholesale price for records released in the USA, [] There was also an escalator clause in the deal that stated that, after $500,000 in sales, the royalty rate increased to 30 percent or about $1.05 per unit. []

[] Jermaine refused to leave Motown and Michael had reservations; their father, however, had none. Although his sons could not record for CBS until the expiry of the Motown contract, he held a press conference to announce the split in an act of willful defiance against Gordy, who had warned against it. Gordy’s common contractual practice was to “own” the names of his bands [] He argued convincingly that “the Jackson Five” was Motown’s possession, as was the logo which read “Jackson 5ive.” Gordy sued both CBS and the Jackson 5 for breach of contract. [] The Jacksons countersued, claiming they were due additional royalty payments. Gordy raised the damages sought from $5 million to $20 million after an old picture featuring Jermaine was used to advertise a CBS television series []

As we read Michael “had reservations” about this move to CBS and even if he also found the alliance with Epic in favor of the group, he wished to leave Gordy and Motown in a friendly manner; he was right in wishing so as we will see later in this blog.

However you can imagine the intensity of the fights between Joseph Jackson, the brutal bull and Berry Gordy, the ex featherweight boxer at Detroit, Michigan!

Among other things, Jermaine Jackson’s behavior is interesting to note. Having married not only Hazel but probably also Motown, he proudly carried the title of “Gordy’s son-in-law”; surely the young artist had several hopes and dreams because of his fortunate alliances. That would explain his “double-agent” actions in this conflict. Sadly for Jermaine, his plans did not turn out as he wished. We will come back to Jermaine Jackson later in other blogs.

A short notice about the Jacksons suing Motown:

http://www.mrpopculture.com/thereport/pop-culture-music-history-four-of-jackson-5-sue-motown/

Pop Culture Music History – Four Of Jackson 5 Sue Motown.

Posted on September 17, 2011 by Mr Pop Culture

Mr. Pop History –
Back in April of 1976, four members of the Jackson 5 sued Motown records, seeking a Superior Court judgment granting termination of any contractual responsibilities to the label and an accounting on alleged royalties due them.

The four were Tariano, Sigmund Esco, Marlon and Michael Jackson. The suit asked the court to order Motown to allow their accountants to audit Motown books covering royalty statements from 1972 to the present (1976).

In  its November 6, 1975 issue, JET published a short article about the Jacksons counter-suing Motown:

The Jacksons Counter-Sue Motown; Want Out Quicker

The Jacksons Family has filed suit to end officially their seven-year business association with Motown Records.

Members of the singing group asked the court to validate their plans to terminate their contract in April 1976 in favor of a deal they have signed with Columbia Records’ Epic Label. They also want court orders forbidding Motown from requiring them to produce any new material before then and from issuing unreleased records after the contract expires []

Another JET article from its February 24, 1977 issue states the following:

Motown Sues CBS For $20M Over The Jacksons Group

The Jacksons, the first of the really hot rhythm and blues recording family groups, are the center of a $20-million lawsuit filed by Motown Records against CBS.

The suit names CBS Inc., CBS Records and Epic Records as well as Jacksons / Arons Enterprises as defendants and cites multiple charges []

In a statement by Michael Roshkind, vice-chairman of Motown Industries, one item arousing Motown ire was the ads for the CBS television series, “The Jacksons.” Several of the ads showed Jermaine Jackson as a member of the group, he said [] Roshkind said CBS immediately removed the ad when Motown attorneys put them on notice.

Roshkind also said Motown was offended by a CBS press conference held before the J-5 contract expired []

Eventually, Michael suggested the name The Jacksons for the group and both sides signed a settlement in January 1980.

228219_203293029708657_2084659_nmike-et-diana-berry-gordy-1cab82c

A serious turn of events in the conflict

Unfortunately, the conflict did not end with the settlement in 1980. Later, in 2003, Michael Jackson again sued Motown and Universal Music Group. At that time, Gordy had almost sold all of his assets, first to MCA and then to EMI.

As we saw in part 3, Gordy sold Motown Records to MCA in 1988 for $61 million. And in 1993, Polygram bought Motown from MCA Records/Boston Ventures for $325 million. Some years later, in 1998, the Canadian owner of Polygram, Seagram, merged it with Universal Music Group. As for EMI, we will read about it later in this blog.

Let us follow Michael Jackson’s lawsuit now. The suit was reported by several papers, for example the famous RollingStone.

Being RS, everything was of course Michael’s fault no matter what! Nevertheless we need to quote the article:

http://www.rollingstone.com/music/news/michael-jackson-sues-motown-20030512#ixzz2C9JOBIZd

Michael Jackson Sues Motown

Pop star seeking royalties, masters from early recordings

By Carrie Borzillo-Vrenna

May 12, 2003 12:00 AM ET

Michael Jackson, reportedly in serious financial trouble, is attempting to put some money back in the bank by suing his former label Motown Records and its parent company Universal Music Group.

Jackson claims that Motown, the label he signed with in 1969, breached a contract dated January 1980 that required the label to pay him royalties for certain pre-1976 recordings made by Jackson as a solo artist and the Jackson 5. In exchange for those royalties, Jackson had agreed to waive his rights to other pre-1976 recordings. The 1980 contract was actually a settlement agreement stemming from lawsuits filed in 1975 and 1976 by the members of the Jackson 5 against Motown over accounting and contractual obligations.

“Neither Motown nor its successors in interest have provided Jackson with a single accounting or paid Jackson a single dollar in royalties,” reads the suit. “Jackson therefore seeks not only a complete and accurate accounting and full payment of all royalties due and owing from Motown, but also rescission of the 1980 agreement.”

Jackson now on Sony’s Epic Records, which he’s also been battling in the courts — is also asking for the rescission of his underlying recording contract with Motown and a judgment wherein he is given back his rights, title and interest in all master recordings and musical compositions that he made with the label as a solo artist and as a member of the Jackson 5 []

Representatives for Jackson and Universal could not be reached at press time.

And another one from BBC:

http://news.bbc.co.uk/2/hi/entertainment/3022737.stm

Michael Jackson is suing Motown Records for money he says he is owed for classic Jackson Five songs.

He filed a lawsuit in Los Angeles alleging he has not been paid royalties due for the music.

Jackson also claims his music has been used in television adverts without his consent.

Motown Records was the best known soul music label in the US when Jackson and his brothers recorded a string of hits for it in the late 1960s and early 1970s, including Never Can Say Goodbye, I Want You Back and I’ll Be There.

But the Jackson Five left Motown in 1976 to sign for Sony under the name The Jacksons following severe rows, which were only settled in a 1980 agreement.

Jackson now wants this settlement annulled by the Los Angeles Superior Court.

The lawsuit alleges that as part of the agreement Jackson forfeited any royalties on Jackson Five and solo material released before the record company split.

But Jackson contends Motown was to pay royalties for previously unreleased material and songs re-released on best-of compilations.

 

Jackson alleges he has not been paid “a single dollar in royalties”.

His lawyers are suing Motown’s new owner Universal Music for unpaid royalties, as well as punitive damages which could run into millions of dollars.

Furthermore, Jackson is demanding the return of “all master recordings and musical compositions made and/or composed by Jackson” during his record contract with Motown.

Universal Music has refused to comment.[]

Contact Music had also published an article about this lawsuit:

http://www.contactmusic.com/news-article/michael-jackson-files-suit-against-motown

Michael Jackson Files Suit Against Motown

         

Pop superstar MICHAEL JACKSON has filed a suit against his old record label
MOTOWN for unpaid royalties.

The 44-year-old BAD singer claims Motown, and its parent company UNIVERSAL
MUSIC GROUP, owes him millions of dollars in royalties from when he performed
with his siblings and his solo work.

The JACKSON 5 have an extensive body of work and, according to the
lawsuit, the group agreed it wasn’t entitled to royalties for any track
recorded before 1976.

 

But the Jackson camp says Motown should pay up if any of their songs were
re-released or put on a greatest hits album.

 

The suit also claims Motown exploited the name Jackson 5 without
permission in areas like, “TV commercials, radio advertisements… for products
unrelated to plaintiff’s musical recordings.”

 

The record label’s conduct, according to the suit, was, “willful and
intentional and done with fraud oppression and malice.”

 

It’s not the first time Michael Jackson has had a squabble with a record
label. Just last year (02), Jackson lashed out at SONY, claiming it failed to
properly promote his last album, INVINCIBLE, which had disappointing sales.
12/05/2003 09:17

And to find out the progress of this lawsuit, please read these quotes:

http://www.musiclawupdates.com/?p=4108

2003Oct

JACKSON FALTERS IN SUIT AGAINST MOTOWN AND UNIVERSAL

 A California judge has dismissed part of Michael Jackson’s lawsuit against Universal Music in which he claimed he was owed royalties for songs he recorded before 1979 (see Law Updates, June 2003). In a January 1980 settlement with Motown, Jackson gave up rights to songs released before 1979, giving the record label exclusive rights to the name the Jackson 5, the group of Jackson-family members that first put the star on the map. Jackson contends he should be paid for any songs he recorded alone or with his brothers that were re-released after the 1980 agreement. Jackson is seeking payment of royalties he claimed are owed and recession of the 1980 agreement. Los Angeles Superior Court Judge Emilie Elias found on Friday that Universal had not breached any fiduciary duty, since Jackson gave up the rights to the pre-1980 tunes.

Or this one from Billboard:

http://www.billboard.com/biz/articles/news/1432105/jacksons-contract-suit-vs-umg-advances

Jackson’s Contract Suit Vs. UMG Advances

| March 29, 2004 12:00 AM EST

A Los Angeles Superior Court judge has cleared the way for Michael Jackson to pursue a lawsuit against Universal Music Group for breach of contract.

NEW YORK–A Los Angeles Superior Court judge has cleared the way for Michael Jackson to pursue a lawsuit against Universal Music Group for breach of contract.

Jackson can now conduct an audit of UMG’s books dating back to 1994. The pop singer filed the suit March 19 in L.A. Superior Court.

In the same case, Judge Emilie Elias last Wednesday dismissed several of Jackson’s royalty claims against UMG, ruling the entertainer couldn’t claim royalties from record sales prior to 1994.

Jackson is accusing UMG of violating a 1980 agreement to pay him royalties from recordings he made with the Jackson 5 and as a solo performer from 1969 to 1976 for Motown Records, which is now owned by UMG.

In the suit, Jackson claims he reached a settlement with Motown in 1980, under which he gave up royalty rights for songs released before then, but that Motown was to supposed to pay royalties for previously unreleased materials and songs re-released on best-of compilations.

The judge last Wednesday limited Jackson to seeking damages for alleged nonpayment only as far back as 1994.

Jackson is seeking an accounting of royalties and unspecified damages. He also wants the 1980 settlement voided and seeks ownership of his Motown master recordings.

“We are confident the [claims] will ultimately be dismissed,” says a spokesman for UMG, a unit of Vivendi Universal.

Los Angeles-based attorney Brian Wolf represents Jackson.

We could not find any information about Jackson auditing UMG’s books dating back to 1994 in the following years. Did Jackson find any opportunity to continue with this battle? Or was he totally exhausted by the 2005 trial? After the trial, he left the US for several months and when he was back again, there is no trace of him pursuing this suit.

large_michael-jackson-berry-gordy-jackson-5

And what happened in between?

You would think that after the settlement agreement in 1980, everything calmed down; and Jackson’s 2003 lawsuit against UMG and Motown came just out of the blue! But this is probably what the media wish us to believe!

A closer look shows us that this was not the case. From the end of the 80’s until at least 1997 there was a hidden battle about Jobete catalog between Berry Gordy and Michael Jackson.

After mid 80’s, when it came up that Berry Gordy could not and would not keep Motown anymore, there was also talk about the Jobete catalog.

In its December 2008 issue, Vanity Fair has published a gracious 6 pages article about Gordy and his world; we find there a quote from Gordy’s long-time friend, Smokey Robinson who said:

When I saw that Motown was beating Berry up and beating him down, and he was getting these calls from the black leaders telling him not to sell—“It’s our heritage”—well, he’s my best friend, fuck Motown. I went to him and told him to sell this sucker and go buy your island. An island with a moat. And surround your island with warriors. And dare somebody to call you and even ask you about a record.

And this is exactly what Gordy did in 1988 as we mentioned before. But apparently he was also open to selling Jobete since he had already had some talks about this with EMI in 1980. EMI did actually manage Jobete outside the US.

From Billboard October 11, 1980:

PolyGram Operation Under New Leader

 [] Discussions between Jobete Music and the Entertainment Co. continue hot and heavy and there’s a likelihood that the Motown publishing wing will be part of the Charles Koppelman – Martin Bandier company by Jan 1. []

But these talks came to nothing. When in 1988, there was another possibility to buy Jobete, EMI, Sony and Michael Jackson were all interested.

In its May 29, 1989  issue, JET published an article about Jackson and Jobete:

Gordy Asks $120 Million For Motown’s Music Catalog; Michael Jackson Shows Interest

Superstar Michael Jackson has expressed an interest in buying Jobete Music, the publishing wing of Motown Records, a spokesman recently told JET.

A recent story in the Los Angeles Herald Examiner said Berry Gordy, the company’s founder, was selling for an asking price of $120 million. However, when contacted by JET, Motown officials had no comment.

Spokseman Bob Jones, vice president of communications for Jackson’s MJJ Productions, told JET that Jackson is definitely interested in purchasing the publishing division whose catalog of music includes most of Motown’s superstars: Stevie Wonder, the Supremes, the Jackson Five, Temptations, The Commodores, The Four Tops and Marvin Gaye.

Jackson already owns the Beatles catalog of hits. According to the Herald Examiner, Sony and Warner are also interested in buying Jobete.

But nothing happened. Apparently, one of Gordy’s sons came forth and wanted to keep the catalog for the family.

However, in 1993 a new and interesting action was taken by Jackson and EMI. The star was ready to let EMI manage his ATV catalog and together they had planned to buy more music catalogs. Please read the following quotes:

The first article published by New York Times on November 1993:

http://www.nytimes.com/1993/11/25/business/the-media-business-emi-to-pay-michael-jackson-70-million-to-manage-music.html?pagewanted=1

THE MEDIA BUSINESS; EMI to Pay Michael Jackson $70 Million to Manage Music

 By ANDREA ADELSON

Published: November 25, 1993

The pop singer Michael Jackson said through his lawyer yesterday that EMI Music Publishing would begin managing his 6,000-title music catalogue, which includes most early Beatles hits, in a deal being described as the most lucrative in music publishing.

Mr. Jackson will receive $70 million in advance against revenue that EMI expected to generate managing the publishing rights to ATV Music. The catalogue, acquired by Mr. Jackson in 1985 for $47.5 million, includes the classic Lennon-McCartney Beatles compositions, as well as songs from Little Richard, Elvis Presley and the Pointer Sisters.

Total revenue over the deal’s five-year term is estimated to be $150 million, said Martin N. Bandier, president of EMI Music Publishing, which controls 900,000 songs in its own catalogues. Financing for Acquisitions

As part of the deal, EMI had agreed to provide financing for acquisitions of other music catalogues in a partnership arrangement, in which EMI and the singer would share future ownership.

Such an arrangement increased the value of the deal, making it the largest in music publishing, according to John Branca, Mr. Jackson’s lawyer.

The deal comes at a difficult time for the singer. Mr. Jackson, who recently ended a world tour so he could be treated for addiction to pain-killers, is believed to be receiving medical treatment in London, according to British news reports. He is facing a lawsuit in California by a 13-year-old boy, who contends Mr. Jackson sexually molested him. Mr. Jackson has denied the charges. Criminal investigations into the allegations are being conducted, and the boy’s civil suit has been set for trial on March 21.

“ATV’s use and value is impervious to Michael’s own success,” Mr. Branca said.

ATV, along with Mijac Music, which controls rights to Mr. Jackson’s own song writing, make Mr. Jackson one of the largest independent music publishers in the world, Mr. Branca said. Mijac Music is excluded from the EMI deal. ‘Major Additions’

“We expect major additions in the next few years,” he said, noting that a probable first target would be the Jobete catalogue of the Motown Records Corporation, owned by Barry Gordy. Several years ago, Mr. Gordy turned down a $175 million offer for Jobete, which then had half the revenue of ATV, Mr. Branca said. Last year, ATV had sales of $25 million.

Mr. Bandier of EMI said his company had managed ATV Music under its previous owner, Robert Holmes a Court, the late Australian financier. And EMI had outbid Mr. Jackson by $500,000 for the ATV catalogue in 1985. “But when Michael agreed to go to Perth to perform at a charity benefit I knew we were out of luck,” Mr. Bandier recalled. “We can’t moonwalk.”

MCA, a unit of the Matsushita Electric Industrial Company, had managed the ATV catalogue under a three-year contract that will expire on Dec. 31.

The second article from Los Angeles Times:

http://articles.latimes.com/1993-11-24/business/fi-60346_1_music-publishing

EMI, Michael Jackson in Publishing Deal : Music: The pop star owns most of the Beatles’ hits. Estimates of the pact’s worth range from $90 million to $200 million.

November 24, 1993|JAMES BATES and CHUCK PHILIPS | TIMES STAFF WRITERS

In what is being touted as the richest music publishing deal ever, EMI Music is expected to announce today an agreement with embattled pop star Michael Jackson under which EMI will administer his ATV Music Publishing catalogue, which includes nearly all of the Beatles’ major hits.

The five-year agreement to help Jackson exploit his portfolio of other people’s music is said to be a deal that will bring the singer $200 million, about half of it in advance. But sources in the music publishing business were skeptical, suggesting that the proceeds will be closer to $90 million, with about $40 million of it coming to Jackson on signing.

As part of the deal, EMI will provide Jackson with a multimillion-dollar copyright acquisition fund for future purchases of music in partnership with EMI, although Jackson will retain ownership of ATV, sources said.

The deal comes at a tumultuous time for Jackson, who has disappeared from public view as he undergoes treatment for addiction to painkillers. He is also the subject of a criminal investigation into allegations that he molested a 13-year-old boy. Jackson has denied any wrongdoing.

Sources said that despite the upheaval in his personal life, Jackson has been keeping abreast of the negotiations with EMI.

“Michael has the largest independent publishing company in the world,” said music industry lawyer John Branca, who represented Jackson in the talks with EMI. “It’s good to know his business can carry on through all of the turmoil.”

Jackson has built a vast music publishing catalogue that is worth, by some estimates, as much as $500 million. ATV includes songs from artists such as Little Richard, the Pointer Sisters and Kenny Rogers and is said to generate about $30 million in revenue annually.

The catalogue also features virtually every hit Beatles song, including “Yesterday,” “Ticket to Ride” and “Revolution.” The only Beatles songs Jackson does not own are those from the movies “Help” and “A Hard Day’s Night.”

The investment in ATV has clearly paid off for Jackson, who raised eyebrows when he bought the catalogue for $47.5 million in 1988. He has since sold some $6 million worth of it.

Managing the publishing rights to catalogues of songs is a lucrative business in which the administrating company receives a percentage of the royalties collected. Companies actively market the songs to artists and for commercials and other purposes. EMI, part of Britain’s Thorn EMI, and its chief rival, Time Warner’s Warner/Chappell Music, continually compete to be the top music publisher.

Warner/Chappell is said to have dropped out of the bidding in October.

“These treasures are now back where they belong,” EMI Chairman Martin Bandier said, noting that EMI had the catalogue before MCA took over several years ago.

Last fall, Elton John and Bernie Taupin signed a $39-million deal with Warner/Chappell Music for the rights to administer all their post-1974 songs.

And the last one from JET, December 13, 1993 

Jackson Inks $100 Mil. Music Publishing Pact With EMI

In what has been called the largest deal in music publishing history, superstar Michael Jackson is set to receive in excess of $100 million to allow EMI Music to manage his music publishing operation.

Jackson’s music division has more than 4000 songs in its catalogue, including most of the hits by the Beatles as well as tunes by the Pointers sisters, Little Richard, Elvis Presley and Kenny Rogers. The EMI deal has been valued at more than $200 million with Jackson getting the $100 million in advance.

Jackson acquired the ATV catalogue of mostly Beatles tunes in 1985 for $47.5 million. His entire music publishing wing, which also includes songs he wrote, has been estimated at approximately $500 million.

The deal also reportedly calls for EMI to provide funds to acquire other music catalogues, and the company and Jackson would share future ownership. 

However, these plans came to nothing. In 1994, all the talks were ended. In 1995, Michael Jackson merged ATV catalog with Sony. As to Jobete, we need to pursue our reading!

In November 5, 1994, Billboard published several articles as a tribute to Berry Gordy, the “Black Disney” as he was called in one of these articles.

Harry Weinger who wrote the article Jobete: Publishing is the highly polished jewel in the Gorsy Co’s crown, also clearly stated in this statement:

Jobete was the piece of his empire Gordy didn’t sell, despite the best efforts of Charles Koppelman and Michael Jackson (p.80).

It was in 1997 that Gordy sold half of Jobete to EMI. Please read some quotations from different sources.

Independent on July 1997:

http://www.independent.co.uk/news/business/emi-secures-copyright-to-motown-classics-for-pounds-132m-1248569.html

EMI secures copyright to Motown classics for pounds 132m

CATHY NEWMAN                         

 WEDNESDAY 02 JULY 1997

 EMI Group, one of the world’s largest music publishers, has secured the copyright to 15,000 classic Motown hits such as My Girl and I Heard It Through the Grapevine in a $132m (pounds 80m) deal.

The company has taken a 50 per cent stake in the Jobete companies – Jobete Music Co and Stone Diamond Music Corporation – owned by the founder of Motown Records, Berry Gordy. Sir Colin Southgate, EMI’s chairman, said yesterday it was likely EMI would buy the remainder of the Jobete companies in the future.

He added that EMI had, through protracted negotiations, gained control of “the greatest private catalogue”. Sir Colin said EMI had “been to the altar three times with Berry, but this is the first time we’ve got married”.

The Jobete catalogue includes Motown classics sung by artists such as Stevie Wonder, Diana Ross, the Jackson Five, Lionel Richie and Smokey Robinson. Through the deal, which was funded entirely in cash, EMI has bought the copyright to songs such as Baby Love, Ain’t No Mountain High Enough and Reach Out I’ll Be There.

Sir Colin said he was confident EMI’s full ownership of Mr Gordy’s catalogue would not be “decades away”. It is thought EMI would take control of the Jobete companies on Mr Gordy’s retirement, if not before. Mr Gordy, who will remain chairman of the business, is 67.

Day-to-day operation of the catalogue will be handled by Martin Bandier, chief executive of EMI Music Publishing.

EMI already had a marketing agreement with Mr Gordy outside North America, which will be extended throughout the world as a result of yesterday’s acquisition.

City analysts were impressed with the deal. One said the price paid was “not unreasonable” and added: “Consolidation in music publishing is a good idea. Music publishing is a very profitable business.” Another said EMI would “do very well” by including the songs in compilations. EMI Music Publishing already owns the copyright to more than 1 million songs, including those by Jamiroquai, M People, and the Prodigy.

Unaudited accounts show that, at 31 December 1995, the Jobete companies had net assets of $45.2m and reported pre-tax profits of $6.7m. The two companies are owned by Mr Gordy and his sister Esther Edwards and was the largest remaining independently owned catalogue. Jobete Music was founded in 1959, and became the music publishing arm of Motown Records.

JET on July 21, 1997:

Berry Gordy Jr. Sells Half Of His Stake In Motown Song Publishing For $132 Million

[] The announcement was made by Gordy and Martin Bandier, chairman and CEO of EMI Publishing.

Gordy said, “Because I’m still a songwriter at heart, I had to find the right company and the right man to take care of my songs and the songs of the extremely talented writers who built this remarkable catalogue. EMI is the company, and Martin Bandier is the man. I’m thrilled that our songs are in his hands, that their future is secure and that I will be working with a friend.”

Gordy, who will continue as chairman and co-owner of his publishing companies, said he would work with Bandier to make sure the songs are used properly. []

In Black Enterprise on October 1997; it seems that some people had asked Gordy why he did not do business with Michael Jackson instead of EMI and he gave them an answer:

Soul for sale

Berry Gordy sells half of Motown catalog for $132 million

[] Now Gordy has sold 50% of Jobete Music Co., the publishing arm of Motown records, to EMI Music Publishing for $132 million in what’s considered one of the most significant music publishing deals of all time. [] EMI will handle the administration of Jobete and its sister company, Stone Diamond Music Corp. []

There were other suitors. “Michael (Jackson) is like my son and we discussed it several times,” says Gordy. “But I had 15 years working with EMI’s system and I want our songs there. They’re the largest music publisher in the world, and now there’s a situation where they can possibly build movies or television projects around our songs.” []

As Sir Colin said in 1997, the remaining of catalog came under EMI’s control in 2003. The deal was completed in 2004:

http://www.telegraph.co.uk/finance/2848844/EMI-takes-control-of-Motown-songbook.html

EMI takes control of Motown songbook

By Adam Jay

12:01AM BST 11 Apr 2003

EMI has bought a further 30pc stake in Jobete, the Motown song catalogue which contains more than 100 number one singles from A,B,C to You Can’t Hurry Love.

The purchase, by the group’s music publishing division for $109m (£70m), increases its stake to 80pc. It bought its initial half stake in July 1997 from Berry Gordy, the founder of Motown Records, and retained an option to buy the remaining shares after five years.

Jobete was founded by Mr. Gordy in 1959 to handle publishing rights for music recorded by artists including Stevie Wonder, Marvin Gaye, the Jackson Five and the Supremes. Mr Gordy sold the Motown label to PolyGram a decade ago but held on to the publishing rights. Only the Beatles’ catalogue is considered more valuable than Jobete.

At its annual meeting last July, EMI indicated it was ready to take full control of Jobete. Chairman Eric Nicoli said he expected the company to buy remaining shares by early 2003.

Yesterday, however, the company said: “Mr Gordy had originally informed EMI last year that he wished to exercise his option to sell his remaining 50pc stake.

However he subsequently expressed his desire to retain an interest in Jobete and the two parties were able to reach a revised and mutually beneficial agreement.” It added that the purchase was funded through the sale of EMI’s final 14.5pc stake in HMV last November.

Under the new terms, Mr. Gordy retains an option to sell his remaining stake in April next year or April 2005. Failing that, EMI has an option to buy in October 2005. A price range between $75.1m and $86.3m applies for either option.

Both parties will also work together on a Motown-based Broadway musical, which Mr. Gordy will produce.

Mr. Nicoli said: “This new agreement is part of our strategy to redeploy our assets from non-core activities – in this case music retail – into core music business such as this highly valuable and sought-after catalogue.”

Analysts welcomed the revised agreement, which helped push the shares up 3 to 94.25p. Paul Richards, of Numis Securities, said: “We’d factored into our forecasts the fact that they’d buy the remaining stake for £120m, but this looks like a much better deal for them.

“Given that the balance sheet is slightly under pressure and there are question marks over the dividend, it’s a good move for the company.”

EMI’s share price has fallen to an 18-year low this year and last month had its credit rating cut. A spokesman declined to comment on recent speculation that the group is being targeted by private equity groups.

If you are still with us please be a little more patient because we need to take a short look at the turn of events which happened in 2011.  As we mentioned in part 3, EMI was divided in two and was sold to UMG and to Sony + an investor group. EMI’s publishing catalog was sold to Sony + investors.

In his article, Sony-EMI Deal Reunites Jackson 5 Songs With Michael Jackson published in Forbes on November 14, 2011, Zack O’Malley Greenburg gives us a description of this business deal:

[] On Friday, a Sony-led team of investors purchased EMI’s entire publishing catalog for $2.2 billion. The group includes billionaire David Geffen, the Blackstone Group’s GSO Capital Partners LP, and none other than the estate of Michael Jackson (its stake is nested within Sony’s 38% share of EMI, according to sources close to the negotiations).

The move makes sense for reasons beyond just the sentimental. Michael Jackson’s estate still co-owns the separate Sony/ATV publishing catalog in a joint venture with Sony; that company, headed by former EMI chief Marty Bandier, will administer the newly-acquired EMI assets on behalf of the investors.

Still, the reunion is little more than a drop in the financial bucket. Because Sony/ATV will soon begin receiving administrative fees from the EMI catalog’s new owners, its own value is likely north of $2 billion as well []

As a reader noticed in his or her comment on this article, there are one or two questions about how this complex entity works; here it is this comment so you can judge for yourself:

jaris32

A question I have is if Sony, NOT SONY/ATV, owns 38% then why would Michael’s estate’s share be included in Sony’s 38%???? that wouldn’t make sense, now if Sony/ATV owns the 38% then that would make sense because Sony/ATV is a joint venture between SONY and Michael’s estate so since it is a joint venture they would report the percentage as a joint amount such as 38%, but if SONY owns 38% and not Sony/ATV then Michael’s estate’s share wouldnt be included in that because Michael’s Estate doesn’t own half of all of Sony, it only owns half of Sony/ATV, so they wouldn’t lump Michael’s estate’s share with Sony’s like that, that just wouldn’t make sense, if Sony (NOT SONY/ATV) owns EMI then the reports would say that Sony owns 19% and Michael’s estate owns 19% and a consortium of investors own the remaining 62%, but they wouldn’t lump Michael’s share with Sony’s like that, that would only make sense if Sony/ATV owned the 38% cause since that is a joint venture they’d give a joint ownership amount, as you see they didn’t lump David Geffen’s percentage and the other investor’s percentage in with Sony’s so why lump Michael’s estate’s percentage with Sony’s? that just doesn’t make sense unless it is owned by Sony/ATV.

UPDATE 2/25-2013:

While we were about to post this blog, a new article on EMI, Sony and the Estate of Michael Jackson was published at Billboard. Unfortunately, we do not have an account at billboard.com and could not read the entire article. We hope that soon the content of this article will be published to the larger public. Here are a few lines of it:

http://www.billboard.com/biz/articles/news/1549770/see-who-owns-what-at-emi-publishing

See Who Owns What at EMI Publishing

By Ed Christman | February 21, 2013 7:40 PM EST

Documents reveal breakdown of ownership in the Sony-led consortium’s purchase

Documents just released containing details of the EMI Music Publishing acquisition by an investor consortium led by Sony Corp. of America include much financial data heretofore unknown by the music industry, as well as the general public.

For example, Michael Jackson’s estate owns nearly 10% of EMI Music Publishing, while it will cost about $108 million to rationalize the shift of EMI’s song catalog from being overseen by an operational company to a Sony/ATV Music Publishing-administered song portfolio. Sony/ATV and the Jackson estate declined comment.

estherg21

Some of you may think that Berry Gordy had the right to do business with whomsoever he wished; and the fact that he did not sell Jobete to Jackson does not mean that he did it intentionally to spite him. You might be right. However we need to think a minute and ask ourselves what would happen if he had sold it to Michael. Is it not obvious that Jackson, who owned already ATV, would have become the owner of almost the whole industry? How do you think Jackson’s rivals would feel about this? Would not they do anything to prevent such a business deal?

The fact that Gordy chose to sell his catalog to EMI in 1996-97 when Michael Jackson was no longer on board is relevant in our opinion.

During Michael Jackson’s memorial service on July 7, 2009 at Staple Center, Berry Gordy made a beautiful speech and called Michael “the greatest entertainer that has ever lived.” As we saw above, he even called Michael “like my son”. We believe Gordy’s words. But we also believe that Gordy was and is a businessman who before everybody else worked for his own benefit.

We also believe that the African-American community which is a part of American society, has several social classes with different political tendencies; we have Doctor Martin Luther King Jr. and Michael Jackson and we have Berry Gordy and then also Oprah Winfrey.

Another important fact was Jackson and EMI’s unsuccessful attempt to reunite in 1993. By being willing to reunite, Jackson showed that his intentions towards the industry were noble and protective. He was ready to collaborate and turn a sick industry to a healthy one by foreseeing the economic crisis and encouraging the industry to respect the artists’ rights and by creating an innovative environment where artistry would flourish.

We believe when we have studied all the conflicts and reviewed all the factors involved then we will be able to see their interactions and understand what really happened.

Next blog, more conflicts to study!

Advertisements
This entry was posted in Michael Jackson - RTs and Incs and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s